What is a bank draft, when do you need one, how much it costs, and how to get one at any Canadian bank
A bank draft (also called a bank money order) is a cheque issued by a bank on behalf of a customer. Unlike a personal cheque, a bank draft is guaranteed by the bank — the funds are immediately taken from your account and held by the bank, so the recipient knows the payment is secure and cannot bounce. Bank drafts are commonly used for large transactions where personal cheques are not accepted.
Down payments, closing costs, deposits — typically require a bank draft
Buying a car from a private seller or dealership requiring guaranteed funds
First/last month rent for apartments where landlords want guaranteed payment
Court-ordered payments or legal settlement amounts
| Bank | Bank Draft Fee | Available How? | Currency Options |
|---|---|---|---|
| TD Canada Trust | $9.95 | Branch only | CAD, USD, other currencies |
| RBC | $8.50 | Branch only | CAD, USD, other currencies |
| Scotiabank | $9.95 | Branch only | CAD, USD |
| BMO | $9.50 | Branch only | CAD, USD |
| CIBC | $9.95 | Branch only | CAD, USD |
| Credit unions | Varies ($0–$10) | Branch only | CAD usually, USD some |
| KOHO | N/A | Not available | N/A |
| Type | Issued By | Guaranteed? | Max Amount | Typical Fee |
|---|---|---|---|---|
| Bank Draft | Bank | Yes — bank guaranteed | Unlimited | $8.50–$9.95 |
| Certified Cheque | Your personal cheque, certified by bank | Yes — funds earmarked | Unlimited | $10–$20 |
| Money Order | Bank or Canada Post | Yes | $999.99 (Canada Post) | $5–$10 |
| Wire Transfer (EFT) | Bank electronically | Yes | Varies | $0–$25 |
| Interac e-Transfer | Bank digitally | Yes | $100/day (most banks) | $0–$1.50 |
While KOHO doesn't issue bank drafts, it's perfect for everyday no-fee banking. Get $100 free with code 45ET55JSYA.
Open KOHO — Code: 45ET55JSYAA bank draft is issued by the bank itself — the bank debits your account and issues a cheque drawn on the bank's own funds. A certified cheque is your personal cheque that the bank has certified, earmarking the funds in your account. Both are guaranteed forms of payment. Bank drafts are more commonly used in Canada; certified cheques are less common since banks often only certify their own customers' cheques. Both cost approximately the same.
A Canadian bank draft is typically valid for 6 months from the date of issue. After 6 months, most banks will treat the draft as stale-dated and may refuse to cash it. If your draft expires before use, return to the issuing bank branch to have it reissued (usually with a new fee).
No. Bank drafts can only be issued to existing account holders at the bank. You must have sufficient funds in your account to cover the draft amount plus the fee. Non-customers cannot get a bank draft at a bank; they would need to use a money order from Canada Post instead.
If you lose a bank draft, contact your bank immediately. They will typically issue a stop payment and can reissue the draft after a waiting period (often 30–90 days to ensure the original is not cashed). There may be an additional fee for stop payment and reissue. Treat bank drafts like cash — if someone else cashes the original, recovery may be difficult.
In some cases, yes. For smaller real estate transactions (deposits, some closing costs), Interac e-Transfer may be accepted. However, many real estate transactions — especially closing costs and large down payments — specifically require a bank draft or wire transfer for regulatory and security reasons. Check with your real estate lawyer before assuming e-Transfer will be accepted.